PASSING OFF AND INFRINGEMENT

 

PASSING OFF AND INFRINGEMENT

INTRODUCTION

·         A trademark in relation to goods conveys to the general public and specifically to the consumers about the origin and quality of those goods.

·         A trademark is the foundation of one’s business to distinguish from others.

·         Protection of trademark is important not only from the business point of view but also for the protection of consumer from fraud and imposition.

·         The first Trademark legislation was enacted in India in 1940, but before that, protection to trademarks in the country was governed by the principles of common law based on English cases.

PASSING OFF

·         Passing off action is based on common law principle

·         The damages claimed for in an action for passing off is “un-liquidated damages”.

·         “a man may not sell his own goods under the pretence that they are the goods of another man”

·         Passing off cases are often cases of “deliberate and intentional misrepresentation”

·         The law of passing off applies whenever there is the prospect of confusion between marks and getup or where there is the prospect of confusion of identity through the unauthorised use of similar marks or get-up

·         Passing off is not defined in the Trademark Act, 1999. It is referred to in Section 27 (2), 134 (1)(c) and 135 of the Act.

·         Singer Manufacturing Company v. Loong (1880) 18 Ch. D. 395

·         No man is entitled to represent his goods as the goods of another man and no man is permitted to use any mark, sign or symbol, device or other means, whereby, without making a direct false representation himself to a purchaser who purchases from him he enables such purchaser to tell a lie or to make a false representation to somebody else who is ultimate customer.

1. Misrepresentation

2. Made by aa person in the course of trade

3. to prospective customer of his or ultimate consumers of goods or services supplied by him

4. which is calculated to injure the business or goodwill of another trader (in the sense that it is reasonable foreseeable consequence)

5. Which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quit timet action) will probably do so.

ELEMENTS TO BE PROVED FOR PASSING OFF ACTION

 “classical trinity” – the three elements of tort of passing off – Goodwill, Misrepresentation & Damage

 Goodwill:- Goodwill is the benefit and advantage of a good name, reputation, and connection of a business. The goodwill of a business must emanate from a particular center or source. it has power of attraction sufficient to bring customers home to the source from which it emanates.

Misrepresentation:- In its classic form the misrepresentation which gives rise to an action of passing off is an implied representation by the defendant that his goods are the goods of the plaintiff.

Damage: the plaintiff must demonstrate that he suffered or in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief endangered by the defendant’s misrepresentation that the source of the defendant’s goods or service is the same as the source of those offered by the plaintiff. In a passing off action, damage is presumed even if there is likelihood of deception.

Elements- Erven Warnick B.V. v. J. Townend & Sons (Hull) Ltd.   1980 RPC 31

ICC Development (International) Ltd. vs. Arvee Enterprises, the Court held that “passing-off” is:

 A misrepresentation;

·         Made by a trader in course of business;

·         To prospective customers of his or ultimate consumers of goods or services supplied by him;

·         Which is calculated to injure the business or goodwill of another trader which can reasonably be foreseeable; and

·         Which causes actual damage to a business or goodwill of the trader by whom the action is brought or in a quia time action will probably do so.

CHARACTERISTICS OF PASSING OFF ACTION

·         Proof of fraudulent intent not necessary

·         Passing off not limited to goods

·         Evidence of false representation, but not deception necessary

·         Plaintiff and defendant need not be in the same field

·         Prior user to be established

ISSUE IN A PASSING OFF ACTION

·         would the users of the defendants,

·         either the actual user or the proposed user,

·         be likely to lead persons,

·         either members of trade or of the public,

·         to suppose that the defendant’s goods so sold were the product of the plaintiff’s,

·         or that the business concerned in its production was the plaintiff’s or was associated with the plaintiff’s business

FACTORS TO BE CONSIDERED IN CASE OF AN ACTION FOR PASSING OFF (Test)

·         Cadila Health Care Ltd. V. Cadila Pharmaceutical Ltd (2001) 5 SCC 73

·         The nature of the marks, i.e, whether the marks are word marks or label marks or composite marks, i.e, both words or label works.

·         The degree of resemblance between the marks, phonetically similar and hence similar in idea.

·         The nature of goods in respect of which they are used as trademarks.

·         The similarity in nature, character and performance of goods of the rival traders.

·         The class of purchasers who are likely to buy the goods bearing the marks they are likely to exercise in purchasing and/or using the goods.

·         The mode of purchasing the goods or placing orders for the goods.

·         Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.

DEFENCES TO A PASSING OFF ACTION

·         The defendant may prove that the plaintiff’s business is either fraudulent or forbidden by law

·         A false representation contained in the mark itself did furnish a defense at law and at equity

·         The mark complained of is not distinctive of the plaintiff’s business and there is no likelihood of passing off by reason of defendant’s use of the mark

·         The plaintiff is guilty of delay, acquiescence, latches, etc. or the defendant has prior used the mark.

·         The defendants mark represent his own name which he has the right to use.

·         Innocent misrepresentation by the defendant also constitutes a valid defense against passing off action.

·         The defendant is using the Plaintiff’s mark by way of a license.

·         The field of activities of the parties are completely different.

·         The defendant claims right of concurrent use of his mark. Honest and concurrent user of a trademark when established will constitute a defense.

·         The defendant’s use of the mark is the bona fide description of the character or quality of goods or services.

·         The defendant may successfully plead and establish that the alleged misrepresentation was made by his employee outside the scope of his authority and contrary to express instructions.

·         the defendant may plead that the plaintiff has abandoned his mark and that the defendant has either already moved for rectification of register for removal of mark or proposed to do so

A CASE ANALYSIS ON PASSING-OFF

Facts of the case:- the Plaintiffs were selling tooth powder under the Trademark “Colgate” in cans bearing distinctive get-up and colour scheme.

The colour combination was purportedly applied by the defendants on their cans for a similar range of products.

Colgate alleged that Anchor had adopted similar trade dress in terms of layout, get-up and colour combination with the obvious intention to encash upon the plaintiff’s goodwill and reputation.

Decision:- As the Court found similarity of look and appearance of the defendant’s trade dress was that with the plaintiffs trademark, the Plaintiff succeeded and the Court granted a perpetual injunction in favour of Colgate

INFRINGEMENT OF A TRADE MARK

Section 27(1) of the Trademarks Act, 1999 provides that a person shall be entitled to initiate legal proceeding to prevent or recover damages for the infringement of a registered trademark.

Infringement occurs when someone else uses a trademark that is same as or deceptively similar to registered trademark for the identical or similar goods or services as to cause confusion in the mind of the public

 This right of bringing an infringement action against the defendant has been conferred by Section 28 of the Trademarks Act, 1999

Section 28 of the Act provides that the registration of a trademark gives to the proprietor of a registered trademark an exclusive right to use the trademark in relation to the goods and services in respect of which the trademark is registered and to obtain relief in respect of infringement of the trademark.

Trademark infringement claims generally involve the issues of likelihood of confusion, deceptive marks, identical marks and dilution of marks

Section 29.   Infringement of registered trade marks.

(1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark.

(2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which because of--

(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or

(b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or

(c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark.

(3) In any case falling under clause (c) of sub-section (2), the court shall presume that it is likely to cause confusion on the part of the public.

(4) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which--

(a) is identical with or similar to the registered trade mark; and

(b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

(5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.

(6) For the purposes of this section, a person uses a registered mark, if, in particular, he--

(a) affixes it to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark;

(c) imports or exports goods under the mark; or

(d) uses the registered trade mark on business papers or in advertising.

(7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labeling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorised by the proprietor or a licensee.

(8) A registered trade mark is infringed by any advertising of that trade mark if such advertising--

(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or

(b) is detrimental to its distinctive character; or

(c) is against the reputation of the trade mark.

(9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly.

WHAT CONSTITUTES INFRINGEMENT?

Section 29 of the Trademarks Act, 1999 deals with infringement. In this context, the ingredients of Section 29 (1) are as follows:-

·         The plaintiff’s mark is registered.

·         The defendant’s mark is identical with, or deceptively similar to plaintiff’s registered mark;

·         The defendant has taken any essential feature of the mark or has taken the whole of the mark and then made a few additions and alterations.

·         The defendant’s use of the mark is in course of the trade in respect of goods/services covered by the registered trademark.

·         The use of the infringing mark must be printed or usual representation of the marking advertisements, invoices or bills. Any oral use of the trademark is not infringement.

·         The use by the defendant is in such manner as to render the use of the mark likely to be taken as being used as a trademark.

·         The defendant’s use of the mark is not by way of permitted user and accordingly unauthorised infringing use.

IN WOCKHARDT LTD. VS. ARISTO PHARMACEUTICALS LTD., THE MADRAS HIGH COURT SUMMARISED THE LAW RELATING TO INFRINGEMENT CASES

 The registered proprietor of a trademark has exclusive right to the use of the trademark in relation to the goods and services in respect of which the trademark is registered and to obtain relief in respect of infringement of the trademark in manner provided by the Act.

Whether it is deceptively or has become publici juris is a question of fact to be established.

 When a number of marks, all have a common element, may it be prefix, suffix or root, i.e. essential part or the core of the mark, they come to be associated in the public mind as an indication of the same source, which misleads or causes deception or confusion.

Marks must be looked at from the first impression of a person of average intelligence and imperfect recollection.

It is the common element that has to be identified in an impugned mark and the registered trademark and if such common element is highly distinctive and is not just a description or a commonly used word, the likelihood of deception or confusion would be very much there, despite the fact that it might differ in similarity in certain letters.

The nature of the commodity, the class of purchasers, the mode of purchase and other surrounding circumstances must also be taken into consideration.

Marks must be compared as a whole, microscopic examination being impermissible

The broad and salient feature must be considered, for which the marks must not be placed side by side to find out the differences in design.

 Overall similarity is the touchstone.

It is not the colour of the container or the difference of the product, but it is the statutory right to the word that has to weigh

The plaintiff need not in general show prima facie case that is required to be shown

must be something more than a case that will avoid the action being struck out as frivolous or vexatious and even if the chance of success at the trial are only twenty percent, the statutory protection is absolutely necessary by way of an injunction in order to prevent confusion or deception arising from similarity of marks.

INSTANCES WHERE THE ACTS CONSTITUTED INFRINGEMENT OF TRADEMARK

·         Taking substantial feature of the mark

·         Additions

·         When a mark is copied

·         Marks likely to cause confusion

·         Use of reconditioned or second articles

·         Printing of labels

·         Goods manufactured by third party would constitute infringement

·         Marks used along with other’s mark

·         Similar marks in medicinal products

·         Marks with international reputation used unauthorisedly

WHO CAN SUE FOR INFRINGEMENT?

·         The proprietor of the registered trademark or his legal successor.

·         A registered user of a trademark subject to a prior notice to the registered proprietor and consequent failure of the registered proprietor to take any action against the infringer.

·         An applicant for registration of a trademark. Legal heirs of the deceased proprietor of a trademark.

·         Any one of the joint proprietors of a trademark.

·         A foreign proprietor of a trademark registered in India when Infringement occurs in India

WHO CAN BE SUED?

·         The infringer who directly by his action causes infringement or who uses or contemplates or threatens to use a trademark infringing plaintiff’s right.

·         The master responsible for his servant’s act of infringement.

·         For example, a worker who is engaged in the business of making false labels is a servant of the master who orders the making of such labels. It is the master in such a case who is to be sued.

·         The agents of an infringer.

·         Directors and promoters of a limited company cannot be joined as co-defendants unless they have personally committed or directed infringing acts.

JURISDICTION:

·         Suit for infringement or for passing off is to be filed in the court not inferior to a District Court having jurisdiction to try the suit.

·         District Court having jurisdiction includes a District Court within the local limits of whose jurisdiction, at the time of the institution of the suit or other proceedings, the person instituting the suit or other proceedings, or where there are more than one person, any of them who:-

·         Actually and voluntarily resides; or

·         Carries on business; or

·         works for gain;

·         can bring in an action against the defendant.

EVIDENCE IN INFRINGEMENT ACTIONS

·         The fact of registration of the plaintiff’s mark is to be proved by production of a copy of the entry on the register certified by Registrar and sealed with the Trademark Registry.

·         The certified copy shall contain all the entries in the register relating to the mark including the conditions, if any, subject to which a mark is registered.

·         The plaintiff must establish that the use of the mark complained of comes within the scope of definition of infringement.

·         Where the defendant has absolutely copied the mark and made a facsimile representation of it, no further evidence is required.

·         Where the mark used by the defendant is not identical with the registered trademark, the court has to determine the two marks are deceptively similar.

·         Opinion evidence is not admissible, but statement of witnesses to the effect that they themselves would be. deceived are admissible

ACTS NOT CONSTITUTING INFRINGEMENT

·         Where the plaintiff has no title to sue;

·         Where the registration of the trademark is not valid and liable to be expunged;

·         When the use of the mark by the defendant is not an infringement under Section 29;

·         When a person uses a trademark in accordance with honest practices in industrial and commercial matters that do not take unfair advantage.

·         When a person uses a trade mark in relation to goods or services indicating character, quality or geographical origin

·         When a person uses a trade mark in relation to services to which the proprietor has already applied the mark or registered user the object of the use is to indicate that the proprietor or the registered user has performed the services.

•         When a person uses a trademark, which is subject to any conditions or limitations, beyond the scope of such conditions or limitations will not constitute infringement.

·         When a person uses a mark in relation to goods to which the mark has been lawfully applied, or where the registered proprietor has consented to the use of the mark. This applies to cases where goods are purchased in bulk and sold in retail applying the mark.

·         When a person uses a mark in relation to parts of a product or accessories to the goods in respect of which the mark is registered if the use is reasonably necessary to indicate that the goods so adapted.

·         When a person uses a mark or a similar mark in the exercise of a right conferred by independent registration.

·         When a person assigns a trademark to another, this will not affect the right of that person to sell or deal in the goods bearing that mark.

CASE ANALYSIS ON INFRINGEMENT

1. Castrol Limited Vs P.K. Sharma

 Facts of the case: Plaintiff is the registered owner of the trade marks Castrol, Castrol Gtx And Castrol Gtx 2 in respect of oils for heating, lighting and lubricating. During the month of December 1994, plaintiffs came to know that the defendant was carrying on business of selling multigrade engine oil and lubricants under the trade mark 'Castrol Gtx & Castrol Crb' IN IDENTICAL containers as used by the plaintiffs. Plaintiff filed a suit for perpetual injunction.

Held: Hon’ble Delhi High Court while passing an ex parte decree held that the user of the said trade marks by the defendants, who have no right whatsoever to use the same is clearly dishonest and is an attempt of infringement. The prayer of the plaintiff is accepted and they are restrained by a decree of injunction from selling, advertising directly or indirectly in multigrade engine oil with the aforesaid trade marks in containers which are similar to the containers being used by the plaintiffs

2. RANBAXY LABORATORIES LTD. VS. DUA PHARMACEUTICALS LTD

• Facts of the Case:-the plaintiff company manufactured drugs under the trade name "Calmpose". The defendant company subsequently floated its similar product under the trademark "Calmprose".

 Held: The Hon’ble Delhi High Court held that the two trademarks having appeared phonetically and visually similar and the dimension of the two strips being practically the same including the type of packing, the colour scheme and manner of writing, it is a clear case of infringement of trade mark and the ad interim injunction granted in favour of the plaintiff.

WHAT THE PLAINT SHOULD CONTAIN?

·         The pleadings must contain a clear and conscience statement of all material facts relied upon by the plaintiff, but not evidence.

·         It should specifically allege what the defendant has infringed or threatened to infringe in case of registered mark.

·         In case of passing-off, the plaintiff must specifically allege the wrong that has been done to his goodwill or business and also the act of misrepresentation committed by the defendant.

·         Particulars of the acts committed by the defendant which form the basis of allegation must be given.

·         Where the fraud is desired to be raised, it must be clearly pleaded, and particulars of fraud must be stated.

·         Where both the infringement and passing off are combined in the suit, the plaintiff should state that by virtue of such user the mark has become distinctive of his goods.

RELIEFS IN SUIT FOR PASSING-OFF AND INFRINGEMENT

·         Accounts of Profit

·         Damages

·         Injunction

·         Section 135 (2) further provides for ex parte injunction or any interlocutory order for any of the following matters, namely:-

·         For discovery of documents;

·         Preserving of infringing goods, documents or other evidence which are related to the subject-matter of the suit;

·         Restraining the defendant of or dealing with his assets in a manner which may adversely affect plaintiff’s ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.

DIFFERENCE BETWEEN PASSING-OFF AND INFRINGEMENT

·         Passing off action is based on common law principle that nobody has any right to represent his goods as somebody else. Such action is recognised both in respect of unregistered as well as registered trademark. An action for infringement on the other hand is based on the right acquired by registration and is possible only in respect of registered trademarks.

·         An action for infringement is a statutory right. It is dependent upon the validity of the registration and subject to other restriction laid down in the Act. On the other hand, in a passing off action registration of trademark is not relevant. It is based on property in goodwill acquired by use of the mark.

·         The proprietor of an unregistered trademark whose mark is used unauthorised by another cannot sue for infringement of a trademark. His only remedy lies in bringing a passing off action.

·         In an infringement action, the plaintiff is not required to prove the reputation of his mark, which is not the case in case of passing off. In passing off action, the plaintiff has to prove that his mark has acquired reputation in relation to any goods delt with by him.

·         An infringement action can result in the restraining of defendant from using the registered trademark whereas in a passing off action the defendant is restrained from selling the article without clearly distinguishing from the goods of the plaintiff.

·         In an action for infringement, the use of trademark of the plaintiff, in relation to goods is a sine qua non for the action. In contradiction, in a passing off action, it is deceit as practiced on the public and not the use of the trademark that is to be shown.

·         Protection of trademark is important not only from the business point of view but also for the protection of consumer from fraud and imposition.

·         However, it is beneficial if combined action for infringement and passing off is brought in one suit as incorporating a plea of infringement, if the mark gets registered can always amend the plaint.

·         The present Act expressly recognises the common law remedy and thus saves both the registered and unregistered trademarks from being misused.